Accrued Benefits

In a defined benefit (final salary or career average) occupational pension scheme, accrued rights are the benefits a member has already earned for service completed, before any question of future accrual. Under the Pension Schemes Act 1993, where a member leaves service they may take their accrued rights (including any transfer credits allowed under the scheme) as short service benefit, or have them transferred to another occupational pension scheme with a view to acquiring transfer credits for the member under the other scheme. Alternatives to short service benefit may only be substituted if the member consents, or in other prescribed cases.

The Pensions Act 1995 imposes further protection through what are now called the subsisting rights provisions, which apply to any power conferred on any person by an occupational pension scheme to modify the scheme, restricting how trustees or employers can alter accrued entitlements. Defined benefit schemes are usually workplace pensions arranged by an employer, sometimes called final salary or career average schemes, and it is this category of scheme — where the promise is a defined level of benefit rather than a pot of invested contributions — in which the concept of protected accrued benefits chiefly arises.